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Congress eyes replacing excise tax with diesel tax

U.S. House members are again considering replacing the 12 percent tax on new truck and trailer purchases with a diesel tax increase of 6.4 cents per gallon.

Reps. Jim Gerlach (R-Penn.) introduced the Heavy Truck Tax Fairness Act March 29, which was referred to committee the same day. H.R.4321 would repeal the 12 percent federal excise tax and replenish that tax money with a hike in federal diesel excise tax of 6.4 cents per gallon.

The bill’s co-sponsor, Rep. Earl Blumenauer (D-Ore.), said the Highway Trust Fund nearly exhausted its funding several times recently and Congress must consider new revenue sources to meet infrastructure needs. This 12 percent tax is an important revenue funding source, but during economic downturns, truck and trailer sales fall, resulting in fewer incoming tax dollars.

If passed, the change would “ensure the aggregate tax burden stays roughly equivalent over the next decade,” Blumenauer said.

He also said the measure would not affect owner-operators as much as larger companies, but that he “pledge[s] to work with affected groups as this legislation advances to ensure that the legislation, as enacted, is as carefully tailored and broadly beneficial as possible.”

American Trucking Associations President and CEO Bill Graves said the change should decrease the cost of a new truck by $15,000. If approved, the legislation “would not only reinforce the ailing Highway Trust Fund, but would provide a boost to U.S. manufacturing and speed adoption of environmentally friendly technologies,” Graves said.

Other backers of the bill include the Trunk Renting and Leasing Association and the Association for the Work Truck Industry.

In 2010, House members referred this legislation to committee with no co-sponsors.